I Killed a Hedge Fund
5 Pages Posted: 23 Jul 2012
Date Written: July 23, 2012
I killed a Hedge Fund because I felt I had to as a Fiduciary for a $14 billion Public Pension Plan. This fund Arrowhawk Capital Partners was conceived in corruption, and that, along with its mediocre performance sealed its fate.
On August 4, 2010 KRS staff disclosed for the first time to the Trustees the existence of placement agents and $13 million in fees. This internal audit had KRS staff cutting placement agent deals since 2004. The largest placement agent fee paid was over $2 million paid by Arrowhawk to Glen Sergeon.
Even as KRS liquidates its position and the fund shuts its doors, staff is still defending the hiring decision with Arrowhawk. I can only imagine that this is a defensive position taken while the SEC investigation continues. Hopefully the SEC will set an example in this case since public pensions do not need any more Arrowhawks.
Keywords: Hedge fund, public pensions, pension, state retirement funding, placement agents, hedge fund of funds
JEL Classification: H55
Suggested Citation: Suggested Citation